Nobody wants to get into debt. Even yet, taking on some debt, such as a mortgage or a college loan, might be beneficial. On the other hand, owing money to the IRS will only add to your and your family's stress.
Fortunately, the IRS will occasionally work with you to reach an agreement, especially if you can show that your debt was caused by financial hardship. Before you settle, however, you must meet specified conditions and negotiate the complicated tax resolution process. In case you need tax problem help
, IRS tax problem solvers
can provide you with the best assistance.
How to settle a tax debt with the IRS
You may be qualified for one of the IRS's repayment alternatives if you want to settle your tax obligation but can't pay it off in full.
The following are some possible tax resolution options.
1. Installment Plans
IRS installment plans work in the same way as a monthly mortgage or student loan payment schedule does. Instead of paying the full amount upfront, you'll make monthly payments to the IRS until your obligation is paid off.
To be eligible for an IRS tax installment plan, you must meet the following criteria:
• All of your tax returns must be current.
• Most of your state income taxes and late costs must have been paid.
• You must be able to meet the IRS's monthly minimum payment requirements.
However, if you owe more than $50,000 in taxes, the IRS will not enter into a payment plan with you. Furthermore, if the agency believes you will not or cannot make the monthly installments, your request for a payment plan will most likely be denied.
If the IRS approves your request for a payment plan, you will normally have 3 options:
• Installment Agreements for Partial Payments: Installment agreements for partial payments allow you to pay off a lower sum over a set period of time.
• Short-Term Installment Plans: Short-term installment plans give you a 120-day chance to pay off your debt without incurring any additional costs.
• Long-Term Installment Plans: You have up to six years to pay off your unpaid taxes, plus processing fees depending on your payment method, with a long-term installment plan.
2. Offer in Compromise (OIC)
You've probably seen or heard ads promising to help you pay off your tax burden for "pennies on the dollar." These agreements, sometimes known as "offers in compromise," can help you pay less to the government.
Is an offer in compromise right for me?
Every OIC request is not approved by the IRS. When you apply for an OIC using Form 656, the IRS examines your income, expenses, assets, and ability to repay your debt. If the IRS believes that you are unable to pay your tax bill or that doing so would put you in a dangerous financial situation, they may agree to an OIC.
The IRS, on the other hand, may reject your request if:
• You have assets that may be used to completely pay down your taxes.
• You are in a position to enroll in an installment plan since you have the financial means to do so.
3. Other Tax Relief Options
The IRS prefers taxpayers to pay down at least a portion of their debt rather than for the Statute of Limitations to run out. With this in mind, you may be eligible for alternative tax resolution options
such as the ones listed below.
Currently Not Collectible
If you can show the IRS that you are now unable to pay your taxes due to financial hardship, they may place a temporary "not collectible " hold on your account for a set period of time. Wage garnishments, liens, and tax levies will all be put on hold until the hold expires.
Innocent Spouse Programs
Finally, the IRS may be able to help you if your current or former spouse concealed tax debt from you. To be eligible for innocent spouse relief, you must show that your spouse concealed the tax due from you. You'll also have to prove that you were not aware of the unreported income or the usage of unallowable tax credits.
Work with our certified tax resolution specialists for any tax problem help
You've probably never dealt with IRS tax debt settlements before. Thankfully, you don't have to do it alone.
Our team of professional accountants, advisors, lawyers, and IRS tax problem solvers
at MC Tax Relief
is dedicated to providing dependable tax resolution services to individuals like you.
We can walk you through the process, help you fill out papers, and even negotiate with the IRS for a fair settlement. Please contact us today for more information on our services and to see if we can assist you in resolving your tax debt.